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Procurement Strategy

Transport Assets – Wellington City Council

March 2010

Wellington City Council Procurement Strategy – Transport Assets Page 2 of 67

Table of Contents 1 Executive Summary ............................................................................................4

1.1 Statement of Goals/Objectives.....................................................................4 1.2 Summary of Work Programme.....................................................................4 1.3 Summary of Procurement Environment .......................................................4 1.4 Summary of Approach to Work Programme.................................................5 1.5 Endorsement and Approval of Strategy........................................................5 1.6 Strategy Status/Ownership...........................................................................6

2 Context .................................................................................................................7 2.1 Goals and Objectives ...................................................................................7

2.1.1 Council requirements................................................................................7 2.1.2 Legislative framework...............................................................................9

2.2 Procurement Goals and Outcomes ..............................................................9 2.2.1 Subsidy Qualifying Outcomes ................................................................10

3 Procurement Environment ...............................................................................11 3.1 Programme.................................................................................................11

3.1.1 Segmentation .........................................................................................11 3.1.2 Term Maintenance Service Contracts ....................................................11

3.2 Supplier Market ..........................................................................................12 3.2.1 Physical works........................................................................................12

3.3 Current Spend ............................................................................................13 3.3.1 One-off Projects......................................................................................14

4 Delivering the Work Programme......................................................................14 4.1 Introduction.................................................................................................14

4.1.1 General...................................................................................................14 4.1.2 Management...........................................................................................15

4.2 Programme Implementation .......................................................................15 4.2.1 Introduction.............................................................................................15 4.2.2 Professional Services .............................................................................15 4.2.3 Term Maintenance Contracts .................................................................15 4.2.4 Summary – Delivery Models and Supplier Selection..............................19

4.3 Communication Strategy ............................................................................20 4.3.1 Internal Stakeholders..............................................................................20 4.3.2 Other Approved Organisations ...............................................................20 4.3.3 Supplier Market ......................................................................................21 4.3.4 NZTA ......................................................................................................22

4.4 Performance Management and Success Measures...................................22 4.4.1 Physical Works Contracts - Maintenance...............................................22 4.4.2 Physical Works Contracts - Other ..........................................................22 4.4.3 Market.....................................................................................................23 4.4.4 Professional Services .............................................................................23

5 Internal Capability and Approval of the Procurement Strategy ....................23 5.1 Description of Current State and Desired State .........................................23

5.1.1 Structure Roles and Responsibilities of Procurement Team ..................23 5.2 Plan to Fill Capability Gap ..........................................................................24 5.3 Process to Approve Procurement Strategy ................................................25

5.3.1 Internally .................................................................................................25 5.3.2 NZTA Endorsement................................................................................25 5.3.3 Procurement Strategy Review................................................................25

6 Implementation Plan .........................................................................................25 7 Appendices ........................................................................................................26

7.1 Council Procurement Standard (Pre-tender extract) ..................................31 Scoping the Procurement ....................................................................................35


Planning the Procurement ...................................................................................39 7.2 Section 25 LTMA 2003...............................................................................45 7.3 3 Year Capex Transport Programme (2010/11, 2011/12, 2012/13) ...........46 7.4 3 Year Opex Transport Programme (2010/11, 2011/12, 2012/13).............56 7.5 Project Procurement Summaries................................................................64


1 Executive Summary

1.1 Statement of Goals/Objectives The Council’s procurement standard, and s25 of the Land Transport Act 2003 provide the basis on which this strategy is written; least whole-of-life asset cost, best value for money spent. This includes:-

• Robust asset management planning and sound maintenance strategies leading to least whole of life asset costs

• Effective and efficient asset management processes • Retention of adequate in-house skills, experience and expertise to enable

staff to knowledgably and authoritatively communicate with both contractors and professionals

• Competent, competitive and enduring supplier market • Long term constructive relationships with high performance suppliers • Environmentally responsible and sustainable decision making • Contract documentation appropriate, complete/thorough, unambiguous,

professional, comprehensible, and legally enforceable. This Procurement Strategy sets out how the Council intends to achieve value for money in purchasing services for its roading infrastructure assets.

1.2 Summary of Work Programme The current programme of works is setout in the 2009-2012 Land Transport Programme. Maintenance and renewal works for the Land Transport Programme through to July 2013 have been procured under 3 term service contracts. Some upgrade works are also included in the scope of these contracts. Road asset works that do not fall within the scope of these contracts will be procured under separate contracts.

1.3 Summary of Procurement Environment The procurement environment includes the Council, its suppliers (physical works and professional service providers), funding agencies and other Approved Organisations. The Council has retained its in-house professional services capability to undertake routine engineering services. For non-routine, non-repetitive engineering services, the Council engages external professional service providers. The Council has also retained stand alone physical works business units, principally for the maintenance and care of the Council’s assets such as parks and gardens, open space maintenance, and landfill operations. The physical works business units may bid for works within their capability (such as street cleaning), offered by the Council on the open market.


The Council and other Approved Organisations in the region currently experience no shortages of external suppliers. There are no monopoly suppliers, and competition across both the physical works and professional service markets is strong. In the foreseeable future, the Council’s shrinking capital works and upgrade programmes may contribute to a reduction in the number of suppliers in the market, particularly in relation to professional engineering services. Oil prices will continue to fluctuate, which for the roading programme will have a direct bearing on the volume of work undertaken.

1.4 Summary of Approach to Work Programme The bulk of the city’s roading maintenance and renewal is undertaken under term service contracts. The city’s roading network has been divided into two areas. A roading maintenance and renewal contract has been let for each of these areas for the bulk of the road and footpath works. Each contract has an initial term of 3 years with a 2 year right of renewal. If the renewal options are exercised, the contracts will be next tendered to commence in July 2013. These contracts, with a collective annual value of $19M per year are managed by the in-house engineering business unit. Two smaller term service contracts have been let for cleaning and vegetation works within the city’s road reserves. The Council may rationalise the number of term service contracts so that on their renewal, the smaller contracts could be incorporated into the larger ones, or alternatively some of the conflicting elements in the larger contracts may be incorporated into the smaller contracts. This will remove some of the responsibility overlaps that currently exist, particularly in relation to drainage maintenance, and the clearing of carriageway slip debris and general detritus. The Council also calls term service tenders for street light maintenance and for traffic signals maintenance. Professional services for works on the Land Transport Programme outside the scope of these term service contracts are provided by a mix of internal and external resources. External professional suppliers are engaged for those specialist services beyond the capability or capacity of the in-house resource. For physical works beyond the scope of the term service contracts, separate contracts are let. Such works include construction of retaining structures, safer roads projects, minor structures etc. Some of these are below the NZTA threshold of $100,000 for direct appointment, and most are below the $200,000 threshold for closed tender. These are delivered as “staged” contracts (refer NZTA definition). These limits are higher than the Council’s standard limits, however the Council’s Management Board has granted prior approval to use the NZTA limits for work referred to within this Strategy.

1.5 Endorsement and Approval of Strategy This Strategy requires the approval of the Director Infrastructure and the Chief Executive Officer representing the Management Board. Following that approval, the Council will seek endorsement from NZTA.


At this stage the Council is not seeking any exemptions or variations to the NZTA procurement manual rules, or approvals of advanced or customised procedures or of customised supplier selection methods. At each review of this Strategy, the need for exemptions or variations will be reconsidered, and if market conditions or other such factors change, then the Council will consider whether best value for money can be achieved through the use of an advanced component. If so, a reviewed and amended Procurement Strategy will be submitted to NZTA for endorsement.

1.6 Strategy Status/Ownership This document applies to all Council purchasing relating to NZTA subsidised works – both physical and professional services. It complies with the Council’s Procurement Policy and Standard.


2 Context

2.1 Goals and Objectives

2.1.1 Council requirements The Council’s vision is for Wellington to be a vibrant, internationally competitive and affordable city1 The Council has developed both city and organisational strategies. For the city by Strategy Area, the seven Strategies and Aims supporting the Council’s vision are:-

Strategy Area Council Aim

Urban Development A compact, vibrant, attractive city Transport Providing quality connections Governance Delivering trust and confidence in civic

decision-making Environment Protecting and enhancing Wellington’s

environment Economic Development Supporting growth to enhance quality of

life Cultural Well-being Shaping Wellington’s unique cultural

identity Social and Recreation Strong, safe, healthy communities From these strategies, the Council expects the following 13 outcomes for the city:-

1. More liveable

2. Stronger sense of place

3. More compact

4. More eventful

5. More inclusive

6. More actively engaged

7. Better connected

8. More sustainable

9. Safer

10. Healthier

11. More prosperous

12. More competitive

13. More entrepreneurial and innovative

In consultation with the communities, for the Transportation Strategy Area, the community has expressed an expectation for the following outcomes2:- 1 LTCCP 2009-19 page 5 2 LTCCP 2009-19 Page 177


Community outcomes – Transportation Strategy Area:-

1. More sustainable - Wellington will minimise the environmental effects of transport and support the environmental strategy

2. Wellington’s transport system will be designed to meet the needs of its people efficiently and sustainably

3. Wellington’s public transport system will be accessible and affordable for all

4. Wellington will be pedestrian and cyclist friendly

5. Wellington’s traffic will flow smoothly through and around the city and its suburbs

6. Links by land, air and sea will meet the needs of people and enterprises

7. Wellington will have clear directional signage

The Council has expanded its transportation outcomes to meet the communities’ expectations as follows:-

Council Outcome Transportation related outcome

More Liveable Wellington will be a great place to be, offering a variety of places to live, work and play within a high- quality public environment

Better Connected Wellington will have a highly interconnected public transport, road and street system that supports its urban development and social strategies

More Sustainable Wellington will minimise the environmental effects of transport and support the environmental strategy

Safer Wellington will seek to improve the safety and security of its citizens as they move around the city and region

Healthier Wellington’s transport will contribute to healthy communities and social interaction

More Prosperous Wellington will have a coherent and efficient transport system that aids economic development

3

3 LTCCP 2009-19 page 177


2.1.2 Legislative framework The key legislation, regulations, authorities and national strategies relevant to the management of the transportation activity are listed and briefly expanded upon in the Council’s current Transport Asset Management Plan. These include:-

Land Transport Management Act 2003 Land Transport Management Amendment Act 2004 Local Government Act (LGA) 2002 Local Government (Rating) Act 2002 Resource Management Act 1991 Building Act 1991 Health and Safety in Employment Act 1992 Civil Defence Emergency Management Act 2002 Public Works Act 1981 New Zealand Transport Agency (National Strategy) Road Safety to 2010 National Transport Strategy Regional Land Transport Strategy

2.2 Procurement Goals and Outcomes The Council has a comprehensive procurement policy and procurement standard, copies of which are contained in the appendices to this procurement strategy. Both are also available to Council staff via the Council’s intranet. The Council’s Procurement Policy contains a number of the goals and outcomes required of the procurement strategy. Specifically:-

“Sustainable business practice Best value for money over whole of life Open and effective market competition Full and fair opportunity for domestic suppliers Improving electronic business capabilities, including e-commerce Demonstrating compliance with good practice and government guidelines”

The Procurement Policy objective areas are:-

“Sustainability Best value Preferred suppliers Syndicated procurement Fair and transparent Local supply Well planned and executed Technology and best practice Risk management Delegations Compliance”

The Procurement Policy included in the Appendices expands on each of these objective areas. The procurement standard is designed to support the Council achieve its strategic objectives by delivering the following supply related benefits:-


Security of supply Lower costs Reduced risk Improved quality Greater added value Increased efficiency Innovation

This procurement strategy and the Council’s procurement standard complement each other in addressing the Council’s purchasing requirements (including NZTA subsidy-qualifying services).

2.2.1 Subsidy Qualifying Outcomes Section 25 of the LTMA requires the following factors to be addressed in the procurement strategy, all of which are inferred in the Council’s procurement policy:-

Best value for money spent Desirability of enabling persons to compete fairly where 2 or more persons are willing and able to provide the outputs Desirability of encouraging competitive and efficient markets for the supply of the outputs

NZTA has a number of procurement procedures, each with its own set of rules. The following 2 procurement procedures apply to the purchasing of services within this strategy:-

1. Infrastructure 2. Planning and advice

“The Infrastructure procurement procedure covers those activities involving the purchase of:-

New infrastructure or additions or improvements to existing infrastructure Renewal of infrastructure assets The maintenance and repair of existing infrastructure assets to restore their functionality to original levels The operation of those assets in a way that optimises the benefits derived from them.

Typical examples include:- New roads and bridges Additions or improvements to existing road infrastructure Renewal of road pavements and resurfacing Maintenance and repair of infrastructure assets, which are often routine in nature and delivered under a term service contract”

“The Planning and Advice procurement procedure covers the selection and engagement of suppliers to carry out professional services that are not directly related to expenditure on physical infrastructure or public transport services. Typical examples include:-


Travel behaviour change studies and strategies Traffic count surveys Initial investigations of infrastructure development proposals”

The Planning and Advice procurement procedure does not apply to the use of in-house professional services that have NZTA’s prior approval.

3 Procurement Environment

3.1 Programme

3.1.1 Segmentation All Council expenditure is managed under a system of Capex and Opex projects. Each year the Council prepares project budgets for the Land Transport Programme (LTP) and other works not related to the LTP. Contracts let by the Council may include one or more projects. The road maintenance term service contracts include many projects, both Capex and Opex. Information on the Council’s works programmes is contained in various plans, including the Annual Plan, the Council’s Long Term Council Community Plan (LTCCP) and the Asset Management Plans. These documents are all publically available from the Council. Capex and Opex budgets for the next 3 years relating to this Procurement Strategy are shown in the Appendices. Budgets are translated into contracts for works and services once sufficient information and all clearances and approvals are to hand. Budgets may translate into several contracts, and conversely contracts may relate to a number of budgets. Apart from the term maintenance contracts, there is no firm programme for calling tenders.

3.1.2 Term Maintenance Service Contracts In July 2008, two 3 year contracts (each with rights of extension for a further 2 years) were let. The scope of these contracts covered all road maintenance, renewals and upgrades required to preserve the value of the roading asset. One of these contracts covered the Southern area of the city, while the other covered the Northern and CBD areas. In October 2008, a further contract was let for 2yrs and 9 months also with a right of extension for a further 2 years. The scope of this contract covered the vegetation control and cleaning functions associated with road maintenance, for all but the CBD area. The existing contract for street and sump cleaning in the CBD will need to run its initial term and rights of extension through to 30 June 2012 before a transitional arrangement (such as a further extension, or contract renewal) can be entered into in order to achieve alignment with the terms of the other maintenance contracts. The terms of the 3 contracts let in 2008 were designed to be coincident, in order to provide options for scope improvement in the future. Currently a number of similar functions are shared between contracts and between different contractors. This leads


to issues of accountability which will be addressed by aligning the scopes of the renewed or re-tendered contracts. The following table sets out the programme over the next 3 to 5 years for retendering the term service works under this procurement procedure.

Contract Number Description Expected Renewal Date

RS414 CBD Cleaning July 2012 (unless extended a further 12 months)

RS500 Road Maintenance North and CBD

July 2013

RS501 Road Maintenance South July 2013

RS494 Outer City Cleaning and Vegetation Control

July 2013

477N Traffic Signal Maintenance (WCC and NZTA)

July 2011

RS453 Street Lighting Maintenance

August 2012

3.2 Supplier Market

3.2.1 Physical works The contractor market in Wellington comprises large national and multi-national, multi disciplined companies, through to small contractors providing either single or a small range of civil contracting services. The Council has retained a couple of business units for carrying out parks and reserves operations, graffiti removal, landfill operations and pavement and sump cleaning. Some of the work carried out by these business units is on the Council’s roads and streets, however the bulk of their work is not. All of the larger civil engineering maintenance contractors in Wellington have contracted to the Council at various stages over the years. In spite of losing contracts in the past, none has elected to disestablish and vacate the local market. The mix of work available from the various Local Councils and for work on the State Highways and from within the private sector, has been a major factor influencing contractors to remain in Wellington. In 2008, a large multi-national civil engineering company bid for the Wellington maintenance contracts for the first time and secured one of the contracts. That contractor is now established in Wellington, adding capacity, competition and depth to the market.


All of the major road maintenance contractors in Wellington to some extent trade with their competitors – either providing services or purchasing services from each other. Such services include chip sealing, asphaltic concrete supply, temporary traffic management services etc. Each of the major contractors rely to some extent on the subcontractor market for delivery of services such as kerb and channel construction, line marking, vegetation control, plant hire etc. This mix of contractors is healthy for the local market as it allows sufficient depth of experienced resource to address the city’s routine and special needs. Special needs include:-

Emergency response capacity – Wellington is earthquake prone, hilly and subject to high winds and periods of heavy rain giving rise to frequent road blockages from fallen trees, slips and dropouts. CBD – The CBD is typical of most CBDs in that it is confined, with an aged infrastructure, streets congested with underground services, very busy, offering limited opportunity for conducting works which impact on traffic flows, and now compounded by an increasing residential population requiring restrictions on night work within the CBD.

The market currently satisfies the Council’s special needs in that it can provide experienced contractors familiar with the Council processes, offering a wide range of specialist skills suitable for Wellington (particularly slope stability works) and each with a wider network of experienced sub-suppliers that can be called on at short notice – both for work in the CBD and in response to emergency situations throughout the city. The market offers a number of suppliers of critical product or service such as bitumen, aggregates, asphalt, chip sealing, concrete, line marking, and temporary traffic management. There are 3 major aggregate suppliers in the Wellington market. The Council owns one of these, the Kiwi Point quarry, which supplies aggregate to the whole market on a non preferential basis. There are no monopoly contractors in the Wellington roading market, though in highly specialist areas such as traffic signal maintenance, there is limited competition. The market response to the 2008 road maintenance tenders strongly suggests that the market is efficient and effective. Apart from recent announcements by Shell regarding their investment in roading contractors, there is nothing else significant to suggest that in 3-5 years time when tenders for the road maintenance contracts will again be called (or the contracts renewed), that this position will have deteriorated.

3.3 Current Spend The following table outlines the tendered annual value of the contracts in place for the Council’s road maintenance and renewal physical works programmes (2008/09):-

Contract Number

Contract Description Annual Value

Contractor

RS500 Roading and Traffic Maintenance Contract – North and CBD

$11.4M Downer EDI Works


Contract Number

Contract Description Annual Value

Contractor

RS501 Roading and Traffic Maintenance Contract – South

$7.6M Transfield Services Ltd

RS494 Outer City Cleaning and Vegetation Control

$2.5M CitiOps and Parks

RS414 CBD Cleaning $0.6M Transpacific Holdings Ltd

477N Traffic Signal Maintenance $0.45M CSL Traffic Ltd

RS453 Street Lighting Maintenance $0.5M Power Construction and Lighting

All of the above term maintenance service contracts are output based with a mixture of lump sum and measure and value items.

3.3.1 One-off Projects One-off projects include:-

• Slope stability works • Street lighting upgrade works • Safer roads projects • Bus priority laning • Capacity Improvement projects • Urban Development projects • Structural upgrades (tunnels, bridges etc)

All projects are “staged” and for projects valued over the $200,000 NZTA threshold, suppliers will be selected by an open tender process. For more information on the projects, refer Capex and Opex Programmes included in the Appendices.

4 Delivering the Work Programme

4.1 Introduction

4.1.1 General Within the 3 year horizon to 2013, the majority of the Council’s road maintenance and renewal work (and some upgrade works) is covered by the existing competitively bid term service contracts referred to in section 3.1.2 above.


4.1.2 Management The works addressed in this document are managed within 2 of the Council’s 7 Directorates. These are:-

• Infrastructure Directorate, and • Strategy Planning and Urban Directorate

Each Directorate is responsible for purchasing its own services. The Council does not have a centralised engineering services procurement unit, nor is it required as each contract generally requires specialist input from within the Directorate, and the Directorates are governed by the Council’s Procurement Standard. However, where work is required by one Directorate and applicable contract rates exist in another Directorate, consideration is always given to using the existing contractors at the established contract rates.

4.2 Programme Implementation

4.2.1 Introduction The programme involves technical consultancy professional services, and physical works. The technical consultancy services are carried out either by the Council through its professional services business unit, or by engagement of external suppliers from the open market. Physical works are carried out under either term maintenance contracts or site specific contracts.

4.2.2 Professional Services Professional services external consultants are managed under the Council’s pre-qualification system. Details of the pre-qualification system can be found on the Council’s website.

4.2.3 Term Maintenance Contracts Prior to preparing tender documentation for the 2008 maintenance and renewal contracts, the Council openly invited contractors and other interested parties to contribute towards the development of the contract. At the meetings convened for these discussions, all parties were given the opportunity to comment on their preferences. The CEO outlined the Council’s political vision, the Infrastructure Director outlined the Council’s objectives and outcomes expected of the contracts, and the Council engineering staff outlined contractual matters the contractors might wish to consider and comment on. While there was no overall agreement by the participants, of those with the capability to carry out the work, there was a clear preference for a measure and value type of contract administered under NZS 3910 2003 General Conditions of Contract. These participants preferred a contract that separated asset management functions from asset maintenance and renewal activities. They saw the Council as the asset manager, and the contractor as the maintenance/renewal provider. Various contract options including alliancing, NEC Conditions of Contract etc were all given serious consideration by the Council prior to engaging with the market. The Council visited sites where alliancing was in place and discussed matters with the


alliancing parties. In the end, the preference both from the market and within the Council was to a more conservative approach, as referred to above. The previous contracts were performance based contracts requiring the contractors to progressively assume responsibility for the roading assets. It was generally agreed by the contractors and the Council that such an initiative was not working. The general consensus was that the Council should retain responsibility for the assets, determining where treatments should be undertaken, and what the treatments should be. The form of the 2008 contracts was then developed along more traditional lines, with the contractors given the responsibility for fault finding, programming approved works and carrying out physical works, and the Council conducting condition surveys and performing the asset management functions. Contractor payment was based on a schedule of rates, for work completed to specification.

4.2.3.1 Risks and opportunities – Term Maintenance Contracts Based on the consultation and outcomes described above, the Council has returned to a traditional and more conservative approach for the delivery of road maintenance and renewals. In NZTA terms, the contracts are defined as “staged”, and are managed and supervised by the Council’s in-house engineering staff. The risks with this approach are:-

• Job intensive – each job to be uniquely identified, and tracked • Limited opportunity for contractors to upskill in asset management

The opportunities with this approach are:-

• Facilitates new entrants into the market • Places responsibility under the contract with the most appropriate party • Incentivises the contractor to programme the work, and complete it to

specification • Incentivises contractor to find innovative ways to aggregate various

tasks at a worksite, in order to achieve operational efficiency, and minimum disruption for residents

• Council is better able to manage its records • Fewer disagreements on treatment lengths and treatment selections • Full contractor accountability for performance of completed physical

works • Contractor programming of approved works, with Council approval of

the programme • More focus on cost effective work outputs through proven processes

The Council is mindful of encouraging competition in the city, and the need to retain contractors with the equipment and management expertise to assist in times of emergency. To this end the Council has offered the city maintenance and renewal works as 2 packages of work, and required that unless there are no acceptable alternatives, no contractor can perform both contracts simultaneously. The market feedback from the major contractors supported this division. The complexity and interdependence of road maintenance and renewal jobs within the city requires job programming and responsibility for outcome to be carried by the


contractor. While it is an option for some activities to be unbundled, and separately let, the need to have one entity in control of contract jobs is paramount. For this reason the preferred option is for the contractors to take full responsibility for programming and completing every job to specification and on time, irrespective of whether the job is carried out by the contractor’s own resources, or subcontracted. The Council recognises the special attention required and the difficulties associated with working in the CBD. In order to obtain competitive prices for working in the CBD, the Council has required tenderers to price 2 schedules per tender. One schedule for conducting work in the CBD, while the other for the non CBD (ie North/South) areas. This allowed the tenderers to price for the difficulties of working in the CBD, without loading additional costs against the work in the non CBD areas. The Council could then be assured of the CBD and outer areas being priced, and priced competitively. The Council through the tender process could then choose the contractor who could offer best value for money for the CBD and for one of the non CBD areas. The second contract was awarded for the remaining non-CBD area, thereby assuring the Council of at least 2 fully resourced contractors. The roading maintenance and renewal contracts are terms of 3+2 years. The contract terms of the 2008 contracts were considered in depth in the period leading up to tendering. The conclusion drawn was that this format would be of sufficient length to be attractive to, and warrant investment by, the contractors. The term also allowed sufficient time for systems to be bedded-in, particularly if there is a change of contractor. The 2 year term extension is considered both an incentive for excellent performance, and a safety net in the event that either party is dissatisfied and wishes to exit on expiry of the original term. The content of the maintenance contracts may change over time. At each renewal, each activity in a contract will be reassessed, and decisions made as to which contract is best placed to handle that activity.

4.2.3.2 Value for money and sustainable competition For road maintenance and renewal works, the greatest value for money in the city is considered to be in:-

• Establishing acceptable levels of service for the roading network • Identifying the network needs in terms of these levels of service • Sourcing internal and external funds to satisfy these needs • Prioritising and prudently spending available funds on the necessary physical

works The procurement strategy addresses these through:-

• The choice of 2 principal suppliers for road pavement maintenance and renewal

• The choice of contract form which encourages new contractors into the market

• The responsibility for the programming of activities residing with the main contractors

• The choice of contract term, and the bundling of activities to reduce the overall tendering workload, for both the Council and for the market

• The choice of supplier selection (price/quality), which facilitates selection based on whole of life costs as opposed to lowest price.


While in some situations there may be benefit in collaborating with neighbouring RCAs and combining workload into a single contract, the Council considers the main term contracts it offers are of sufficient size ($8M plus per year each) to secure any potential economies of scale. The geography of the Wellington region does not lend itself to TLA collaboration for road maintenance. Similarly, while collaboration with NZTA over combining the State Highway maintenance work and the Wellington city maintenance work into a joint contract is possible, except for traffic signal maintenance, it is very unlikely that any additional economies of scale will accrue. More importantly, a number of road maintenance contracts of this size spread amongst a number of different contractors are required to sustain the competitive market.

4.2.3.3 Contract Management The management of the maintenance and renewals contracts is provided by the Council’s in-house engineering resources. The contracts are written requiring the Council and the Contractor to collaborate in the interests of contract improvement. The contract requires attendance by both parties at regular meetings to monitor programmes and resolve issues. This process proved very effective in the 2002-2008 contracts and has been retained for the 2008-2013 contracts.

4.2.3.4 Delivery Models and Supplier Selection Methods – Physical Works

On completion of the original term of the road maintenance contracts, plus any agreed extensions, the works will be retendered. For the 2008-2013 contracts, the Council used the Price Quality Method for Physical Works contained in Transfund General Circular No. 02/09, and amended for PQM evaluation. This system worked well and the Council received good value for money. Both the Council and contractors now have established tender processes to follow, which should save time and money during the tender and tender letting stages. Price weighting for the maintenance contracts is currently 70%. This will need to be reviewed closer to retendering in light of experience gained in the interim by other Approved Authorities. For road construction and upgrade work not included in the maintenance contracts, price weighting will be considered within the allowable range of the procurement rules depending on the need to select a higher quality supplier. Attribute selection and weighting will be appropriate to the work to hand, and attributes with a pass/fail criteria will have that criteria defined within the tender documentation (typically 35% has been used on any non-price attribute to date). Where repeated construction work of a similar nature is frequently undertaken, the Council is preparing a pre-qualification system for capable contractors. This system will be opened each year to new entrants, and for pre-qualified contractors to update their registration attributes if they wish to do so. The market will be consulted prior to issuing requests for pre-qualification. This system will streamline the tendering process for these works. Details will be posted on the Council’s website. Initially this pre-qualification system will focus on walls and related structures. All contracts within this system will be staged, and those up to $100,000 will be managed either as direct appointments or as closed tenders (between a minimum of


3 selected contractors on the register). Contracts valued above $100,000 will be let either on a closed tender basis or under an open, price quality, tender process. Those over $200,000 will be openly tendered.

4.2.3.5 Summary The delivery of the road maintenance, renewal and minor construction works programme will:-

• See the existing contracts through to the end of their original terms plus any agreed extensions (to 2013 max)

• Look to rationalise contracts/scope of contracts to minimise responsibility overlaps –may involve contract extensions of up to 1 year beyond those contained in original agreements (eg contract RS-414) in order to achieve co-incident renewals

• Consult with contractors before retendering road maintenance and renewal contracts. The Council’s current preferences for road maintenance contracts are for 2 contract areas one of which includes the CBD, and with no contractor able to simultaneously hold both maintenance contracts. Preferred contract terms are 3+2. The preferred style of contract is collaborative, using NZS3910 as the General Conditions of Contract, and tenders evaluated under a price quality method, with weightings to be determined closer to the time.

• Continue letting construction contracts, on a project by project basis, in the first instance, using pre-qualification where this method provides benefits both for the Council and the contractors

• Consult with contractors in the development of pre-qualification systems for physical works

• Retain the services of the Council Business Units for critical/specialised services which have a high impact on the city’s image (eg graffiti management, horticultural/vegetation control, cleaning etc).

4.2.4 Summary – Delivery Models and Supplier Selection

Procurement Procedure

Expected Release or

Renewal Date

Delivery Model Supplier Selection

Infrastructure

RS500 and RS501 July 2013 See Note 1 Price Quality

RS494 July 2013 See Note 1 Price Quality

RS414 July 2012 tba Extend existing contract to 2013 – see Note 2.

RS453 August 2012 See Note 1 Price Quality

477N July 2011 See Note 1 Price Quality

Walls and Minor Structures

The Council is establishing a Walls and Minor Structures Pre-qualification system, which will be open to new entrants each


Procurement Procedure

Expected Release or

Renewal Date

Delivery Model Supplier Selection

Construction year. Information relating to this system will be posted on the Council’s website

Planning and Advice

Professional Services

The Council has its own professional engineering services unit, and for external consultants, operates a Technical Consultancy Pre-qualification system, which is open to new entrants in June each year. Information relating to this system is on the Council’s website

Note 1 The Council’s preference at this stage is for traditional measure and value contracts with some lump sum items, collaboratively managed, NZS3910 General Conditions of Contract, with incentives for contractor performance. Asset management by Principal (treatment length and treatment solution), and fault finding, job programming and job delivery carried out by contractor. However, consultation with the industry closer to the time of calling tenders may alter this preference. Note 2 In situations where a term contract is to be re-tendered in the lead up to, or during a high profile event in the city, the Council may extend the existing term contract for such time as it sees fit to ensure the continuation of a high level of service throughout the event.

4.3 Communication Strategy

4.3.1 Internal Stakeholders This strategy affects the following internal stakeholders:-

• Infrastructure Directorate • Strategy, Planning and Urban Directorate • Management Board (strategy acceptance and sign off by Director

Infrastructure and Chief Executive Officer) All stakeholders have access to this strategy and the opportunity to add value to it.

4.3.2 Other Approved Organisations

4.3.2.1 Neighbouring Territorial Local Authorities (TLAs) The Council’s closest TLAs are:-

• Porirua City Council • Hutt City Council

The Council maintains dialogue at CEO level with its neighbouring Councils. The outcome of this dialogue may have a bearing on procurement arrangements carried


out by each of the TLAs, and in particular in light of the Auckland super-city developments. Irrespective of the outcome of this dialogue, to sustain the competitive market, it is important to ensure that capable contractors remain gainfully engaged in the region, on both long term and project specific works. In the Wellington City Council the two main maintenance contracts are of the order of $8-11M each per year. Experience suggests that maintenance contracts of this size have achieved the benefits of economies of scale which are not further increased in proportion to further increases in contract size. On the contrary, as the contracts increase in size beyond this, they appear to generate a new set of complexities and management issues, which affect both parties and detract from overall contract performance. The contractors consulted prior to the 2008 road maintenance tenders also expressed preference for contracts of this size for Wellington. Communication between the roading market principals to co-ordinate their tender and contract award programmes is considered to be of benefit to both the principal, and the tenderer. Tender submission and pricing can be influenced by the knowledge of success or otherwise of recently tendered contracts. Where tenderers know of the outcome of previous similar tenders at time of submitting each new tender, the factor of uncertainty is removed and tenderers are in a better position to price both realistically and strategically.

4.3.2.2 Wellington Regional Council The City Council’s maintenance contracts allow for a number of minor works to be carried out for the Regional Council. These in particular relate to bus shelter maintenance. The Wellington City Council will continue to maintain dialogue with the Regional Council over sharing such services.

4.3.2.3 NZTA (SH Maintenance) The Wellington City Council maintains dialogue with NZTA over sharing services, particularly along sections of the SH1 through the inner city. Currently the scope of works in the RS494 contract includes vegetation control, sweeping and cleaning works along the section of SH1 from the CBD limits to the airport. The Council also operates the traffic signal maintenance contracts for signals and for the CCTV cameras on both the State Highway and the local roads within the city. Comments in 4.3.2.1 above also apply to communication with NZTA. The Council and NZTA need to be aware of each other’s tender closing and award dates so that tenderers are able to submit tenders confident of the outcome of bids they may have already submitted.

4.3.3 Supplier Market

4.3.3.1 Contractors As with the 2008-2013 maintenance contracts, for future retendering of these major contracts, the Council will be inviting contractors to meet with the Council before tenders are to be called so that the Council can communicate its preferences and


expected outcomes to contractors, and contractors given the opportunity to respond with their feedback.

4.3.3.2 Professional Services Details of the Technical Consultancy Pre-qualification system are available on the Council’s website. Every 12 months, the register is open for new entrants to pre-qualify, and for existing pre-qualified consultants to update their pre-qualification information if they so wish. The process towards developing this system involved an open meeting with 15 of the Council’s larger consultancy services suppliers, at which the proposal to implement a Pre-qualification system was presented, and feedback invited. All attendees responded with positive and constructive comments. After processing this feedback, the final draft documentation was developed and distributed to the market for further comment. The final documentation was issued to the market, based on the Council’s needs, the feedback from the market, and the review comments from NZTA. Information relating to pre-qualification, and the consultants who have pre-qualified, is available on the Council’s website.

4.3.4 NZTA At the initiative of NZTA, regular meetings are held with the NZTA Regional Office staff. These cover the full range of business matters between our 2 organisations.

4.4 Performance Management and Success Measures

4.4.1 Physical Works Contracts - Maintenance Performance monitoring is embodied within the term service contracts. For superior performance (objectively measured) contractors are rewarded with “performance reward work”. For inferior performance, deductions are made to the lump sum management items. The measures are based on the original expectations of the contract, (based on the AMP and the LTCCP), which are reflected not only in the contract specifications, but also in the attribute marking criteria.

4.4.2 Physical Works Contracts - Other These contracts are almost always let using NZS3910 General Conditions of Contract, with a schedule of rates applicable to the project. During 2010, the Council plans to develop and implement a pre-qualification system for contractors supplying repetitive construction type works, such as retaining walls, and other slope stability mechanisms. The success measures for this will include the extent to which the tendering processes are simplified (attribute submission and evaluation etc).


4.4.3 Market For term service contracts, the contractors of interest to the Council are those capable of delivering the full range of services. Developments following recent announcements by Shell regarding their part ownership of contracting companies will be monitored. The Council needs to be sure that any developments do not reduce competition in the local market, and if they do, then the next round of tenders may see adjustments to the contract scope to match the capacity of those remaining in the market. This could mean reducing both the size and scope of the contracts.

4.4.4 Professional Services The major success factor for the professional services pre-qualification system focuses on best value consultant for the consultancy. For this, the Council needs to have a mix of consultants to call on with wide ranging skill sets to assist with the diverse specialisations required by the Council. For 2009/10, the Council has just over 100 pre-qualified consultants, ranging from multi-disciplined international firms, through to single service, sole operators. The pre-qualification system extends across all of the Council’s activities, including its Council Controlled Organisations. It is not limited to roading services only. An applicable standard form of engagement is used for each consultancy engagement (eg ACENZ/IPENZ CCCS short and long form agreements) The success measure will include:-

• The value add of selecting suppliers from a pre-qualified pool, some of whom would have otherwise not been known to the Council

• The ease with which the Council selects its consultants • The reduced workload (zero or minimal attribute submission and evaluation

prior to consultant selection) • Retention of capability and capacity in the market

5 Internal Capability and Approval of the Procurement Strategy

5.1 Description of Current State and Desired State

5.1.1 Structure Roles and Responsibilities of Procurement Team The Council directorates each have sufficient in-house resource and capacity to manage the procurement of their required services. This includes assessing whether the procurement services should be provided from within the directorate, or by engaging the services of external professionals, or sharing in-house resources between directorates. The Council interfaces with NZTA on a number of issues:-


Operative Responsibility LTMA Procurement Strategy Sponsor (Stavros Michael – Director Infrastructure)

Responsible for co-ordinating procurement strategy content, (involves affected directorates) strategy amendments, issues updates, initiating reviews, ensuring approval and endorsement, etc

LTP Sponsor (Deven Singh – Manager Transport Assets)

Responsible for completing LTP on line, liaising or co-ordinating liaison with NZTA on all LTMA procurement matters

Project Managers Proposed projects – Tender Sponsor, champion tender procurement strategy seek approval to tender, develop tender documents, manage legal review, prepare estimate, champion industry consultation, consent consultation, risk assessment and analysis etc, call tenders, champion tender evaluation, lead negotiations with tenderers, recommend award of tender, prepare letters of acceptance etc

Each procurement for roading activities is managed within the Directorate responsible for the project. The appointment of a procurement team from within the Council ranks is managed within the Directorate. Where the Directorate is considered unable to manage the procurement, the Council engages the services of an appropriate technical consultant, selected from the pre-qualification register. Where the Council uses its own resources to manage procurement for LTMA projects, at least one of the team members is a NZTA recognised Tender Evaluator. The Manager Transport Assets (Deven Singh) holds this qualification. The preparation of the 2008 road maintenance contracts was managed internally by the Council, with assistance as required purchased from external technical consultants. The evaluation was conducted by a mix of internal and external evaluators. Typically this combination would be the approach where the Council has an internal competent and qualified resource. The Council employs tertiary qualified civil engineers across a number of its Directorates. In addition to these qualifications, a number of senior engineering staff each has in excess of 30 years of relevant experience.

5.2 Plan to Fill Capability Gap Currently there are no identified gaps in the Wellington market (contractors for physical works, and technical consultants for professional services). The Council’s use of external professional services to complement its internal resources addresses any gaps that may arise in managing projects.


5.3 Process to Approve Procurement Strategy

5.3.1 Internally The process to approve this strategy will involve:-

• Reviews and acceptance by Project Managers • Reviews and acceptance by Unit Managers • Review and sign-off by Director Infrastructure and Chief Executive Officer on

behalf of the Management Board

5.3.2 NZTA Endorsement The Council requests no advanced components or rule variations.

5.3.3 Procurement Strategy Review Triggers for the review include:-

• Issue of amendments to the Council’s Procurement Standard • Issue of amendments to the NZTA Procurement Manual • On instructions from the Council Directors • On each NZTA approval of the 3 Year Land Transport Programme

The sponsor for this strategy is responsible for monitoring these triggers and initiating the review.

6 Implementation Plan Key milestones for implementing this strategy include:-

• Council management board review of the Strategy (per Chief Executive Officer)

• Approval of the Strategy by 31 March 2010 • Endorsement of this Strategy by NZTA (14 April 2010) • Review and update existing data collection systems in terms of compliance

with Appendix E of the NZTA Procurement Manual, by 30 April 2010 • Strategy operational from 1 May 2010


7 Appendices

1. Wellington City Council Procurement Policy

2. Wellington City Council Procurement Standard (Pre-tender extract)

3. s25 Land Transport Management Act 2003

4. 3 Year Capex Transport Programme (2010/11, 2011/12, 2012/13)

5. 3 Year Opex Transport Programme (2010/11, 2011/12, 2012/13)

6. Project Procurement Summaries


Introduction

The Wellington City Council (the Council) is a territorial local authority with obligations to its ratepayers and the public as defined under the Local Government Act 2002.

The Council expects its business units, and encourages other Council Group entities to be guided in their procurement of goods, services and works by the following principles:

sustainable business practice best value for money over whole of life open and effective market competition full and fair opportunity for domestic suppliers improving electronic business capabilities, including e-commerce demonstrate compliance with good practice and government guidelines

This policy compliments, and should be read in conjunction with, detailed guidance contained in the Procurement Standard.

Purpose This corporate policy states the procurement intentions of the Council and aims to: inform the Council’s staff, contractors and consultants (acting on behalf of the

Council) of the behaviour that it considers appropriate when conducting procurement

encourage a common understanding and consistent management practice across the Council to realise supply-related benefits

encapsulate the Council’s core values and guiding principles, and support the delivery of our vision to achieve global competitive advantage.

This policy has general application to acquisition by purchase, hire, lease, rental, exchange and competitive tendering and contracting (outsourcing) arrangements.

Exclusions The following situations are specifically excluded from this policy as other policies and business processes need to be followed:

emergency procurement employment contracts disposal or acquisition of property disposal of assets

Policy Objectives

Sustainability The Council will conduct its procurement in a manner that considers and balances delivery of economic, environmental, social and cultural outcomes.

This will be achieved by:

• making procurement decisions that achieve value for money on a whole-of-life basis and support sustainable business practices (particularly environmental), drive innovation and improve the market competitiveness of Wellington and New Zealand businesses

• minimising adverse environmental impacts arising from Council procurement and ensuring the efficient use of natural resources

• adopting strategies to avoid unnecessary consumption and manage demand of goods, services and works purchased by the Council

Procurement Policy


• considering and building sustainability factors into the Council’s business requirements when scoping all procurement

• including sustainability into the selection criteria for all Council procurement

• requiring potential suppliers to provide adequate sustainability (i.e. economic, environmental, social and cultural) information in their responses

Best value

The Council will seek best value for money from its procurement and supplier management activities.


• encouraging effective competition by providing sufficient opportunity for suppliers to develop and propose solutions capable of satisfying the Council’s requirements

• ensuring the procurement adequately meets the end users (or recipients) need and contributes to the achievement of the Council’s vision and goals

• assessing the relative cost-benefit of the intended procurement process (e.g. running a tender) and factoring this into procurement planning decisions

• including an appropriate balance of financial and non-financial (e.g. functional. technical, environmental, quality, performance, risk etc) selection criteria in procurement decision making

• ensuring financial criteria are based on whole-of-life costs (rather than lowest price) wherever possible

• negotiating to optimise the final terms and conditions of supply (where appropriate) and recording these into formal, sound and robust contracts

• establishing effective contract management processes and resources to sustain performance and leverage supply benefits through the full contract term

Preferred suppliers

The Council will leverage its overall buying power to maximise the benefits from its preferred supplier arrangements.


• mandatory adherence to the Council’s preferred supplier contracts unless prior written approval has been obtained from the designated contract owner

• monitoring the Council-wide use of preferred suppliers and reporting any significant leakage or rogue procurement activity to the Chief Financial Officer

• actively removing other suppliers from the Council’s Financial Management Information System (PeopleSoft) in spend categories where preferred suppliers have been appointed

Syndicated procurement

The Council will undertake syndicated procurement where this delivers best value.


• adopting an organisation-wide perspective to consolidate (bundle) similar contracts across business units to leverage the Council’s total purchasing power where appropriate


• negotiating ‘common use’ clauses into certain Council contracts to allow syndication of these with other Council Group entities (e.g. Council Controlled Organisations)

• investigating and leveraging existing public sector syndicated procurement agreements where appropriate

• collaborating with other public sector agencies to form new syndicated ventures or contracts where appropriate

Fair and transparent

The Council will conduct its procurement with professionalism and integrity. All staff, contractors and consultants who are involved in Council procurement or contract management activities must adhere to the Code of Conduct and:

• conduct all procurement in a fair, consistent, accurate and unbiased manner

• act in good faith throughout all phases of the procurement process

• not be under any obligation (or appear to be under obligation) to anyone other than the Council for the performance of their duties

• not accept gifts or gratuities from prospective suppliers who are actively tendering for the provision of goods and services

• declare all personal interests that may affect (or could be perceived to affect) their impartiality. The declaration together with the mitigating action to be taken must be approved on a ‘one-up’ basis.

Local supply To provide full and fair opportunity for competitive local suppliers of goods, services and works to obtain Council business.


• encouraging effective competition by providing equal opportunity and equitable treatment of potential suppliers on the basis of their financial, technical and commercial capacity

• all things being equal, a local supplier preference will be made on the basis of: first, Wellington City location; second, Wellington Region location; or third, New Zealand location in order of relative priority.

Well planned and executed

All Council procurement will be well planned and executed.


• adherence to the Procurement Standard and appropriate use of the supporting templates and tools

• ensuring the person managing the procurement is competent to perform the required type and level of procurement

• forward planning all significant procurement and contract expiries to improve management visibility and ensure sufficient time and resources are allocated

• engaging all key stakeholders, confirming sponsorship and obtaining the required management approvals before commencing the procurement

• providing regular progress reports to management and key stakeholders, adopting an open ‘no surprises approach’ to any issues that are encountered

• conducting post project reviews of important / complex procurements to share learning and improve procurement practice across the Council


Technology and best practice

Technology and best practice will be used to maximise the efficiency and effectiveness of the Council’s procure-to-pay (P2P) business processes


• optimising the Council systems, information and business processes that relate to the sourcing, ordering, invoicing and payment of goods, services and works

• leveraging the use of Purchasing Cards (P-Card) for the purchase of low value goods and services to minimise transaction and processing costs to the Council

• collaborating with key Council suppliers to streamline and better integrate the ordering, invoicing and payment systems and business processes

• encouraging and promoting the use of electronic business and e-commerce for ordering, invoicing or payment where this delivers clear business benefits

Risk management

At all stages of the procurement process, Council staff must: • consider and monitor the business and process risks involved and seek to

mitigate or manage significant risks wherever possible

• ensure that a contractual situation is not inadvertently and / or prematurely created during the supplier selection process

• not materially alter or amend the Council’s procurement templates and tools unless prior written approval has been obtained from the Procurement team or the Council’s solicitors

• not disclose confidential information that would prejudice legitimate commercial interests of a supplier or might prejudice fair competition between suppliers, without written authorisation of the supplier

• strictly adhere with the New Zealand law and any applicable legislation

For sensitive or high risk procurements, the Council may engage an independent party to provide assurance services or undertake a probity audit to ensure the procurement process and decision making is robust.

Delegations This policy requires adherence to the Delegations Standard.

Accountabilities All staff, contractors and consultants must follow this policy when undertaking procurement for the Council.

Managers are responsible for the operation of this policy. This includes ensuring that staff, contractors and consultants (acting on behalf of the Council) are aware of and comply fully with this policy.

Document control

Version Final draft dated 15 March 2010

Review period Every 2 years (minimum)

Publication Internal document, published on the intranet

Approved by Chief Financial Officer (Peter Garty), effective 16 March 2010

Policy Contact Strategic Procurement Specialist (Wayne Applegate)


7.1 Council Procurement Standard (Pre-tender extract)

What is procurement? Procurement is a process that covers a range of activities starting from the identification of a business need for goods or services through to the end of any supply or contract that may result. Procurement is often confused with the term 'purchasing' that simply refers to one step in a much bigger process. Adopting a procurement focus will support the Council achieve its strategic objectives by delivering the following supply related benefits:

• security of supply

• lower costs

• reduced risk

• improved quality

• greater added value

• increased efficiency

• innovation.

Why use this Standard? The Council operates within an environment of public accountability and scrutiny over how it spends ratepayers' money. As such, the Council must be able to demonstrate at all times that it has achieved best value for money. This Standard helps us ensure our procurement practices are effective and efficient.

Who uses this Standard? Any employee or contractor who intends to procure goods or services on behalf of the Council or any employee who has the delegated financial authority to authorise expenditure for goods or services. This Standard does not apply to:

• employment of staff

• grants and funding

• disposal or acquisition of property

• disposal of assets.

Policy Employees must:


• apply procurement best practice to effectively manage risks and deliver the best outcome

• ensure proposed expenditure contributes to the Council's business objectives

• confirm budget and delegated financial authority (DFA) before committing Council resources

• procure goods or services that are fit for purpose, genuinely needed and best value for money

• use existing supply sources, where appropriate, before seeking a new supplier to the Council

• actively manage suppliers in a fair, open, consistent, unbiased and ethical manner

• comply with all applicable legislation.

Business considerations There are a number of considerations which you must address before you begin and through the subsequent phases of the procurement process. This will ensure the quality of your planning and implementation delivers the business outcomes sought. Refer to this table throughout the procurement process to assess any potential risks or issues:

Type of Risk or Issue

Consider...

Business and Strategic

• why your business unit (BU) or the Council needs to procure the goods or service

• the effect of this procurement on achieving the Council's strategies and outcomes

• if the need is genuine and whether the need can be met in a more effective way

• the specifications of the goods and service required

• if the goods and service as specified will achieve the purpose for which they are purchased

• identify, and engage with other key stakeholders on the specifications or the effect of this procurement

• the public perception of this procurement and the potential processes

• if it is able to withstand the 'Front-page test'

• if the people involved in this procurement have the necessary competency to manage the type and level of the procurement

• if there could be any benefit in bundling requirements (eg within or across BUs) to leverage cost efficiency through economies of scale. If



Consider...

you do bundle or form a syndicate, you should carefully consider the effects this could have on the market and ensure that a fair and equitable process is followed.

• what business continuity plans may be required by the Council and the supplier where the service or supply is critical to the Council's operation (eg how would we continue to operate in the event of an industrial dispute or pandemic emergency)

• planning for any transition to a new supplier or goods or services

• any ongoing contract management requirements. Legal • applicable legislation

• your obligations to consult with any existing suppliers

• your approach to suppliers carefully to avoid inadvertently creating a contractual situation during the procurement process

• how to keep all information confidential

• any intellectual property that could be developed during the procurement, and seek legal advice on how to secure its continuing use

• duties of care to potential suppliers of goods or services as legal action may result if a breach occurs.

Ethical • how to ensure that any conflicts of interest are declared and managed

• how to ensure information received during the procurement process will not be used for personal gain

• the use of consultants as they are required to observe the same ethical standards, principles and behaviours that apply to Council employees.

Economic • the 'whole of life' cost of the goods or service. This includes not only the acquisition cost, but also the operating and maintenance cost over its life

• value for money, which does not necessarily mean selecting the lowest price

• the effect procurement decisions may have on the market

• regular reviews of inventory costs

• whether there is sufficient Capex or Opex budget available for this procurement

• the delegated financial authority required for this procurement. Technological Changes

• the need for the Council's existing information and communications technology systems to be able to communicate with other systems



Consider...

• is there potential for the Council to improve performance or efficiency by using methods of electronic commerce in operations and service delivery

• the Council's capacity to respond to changing demands and expanding range of technology related opportunities

• whether the systems used by the Council have adequate internal controls to protect the integrity and security of data.

Risk whether there are any other risks not covered by the above considerations. If you are in doubt about any of these considerations contact the Procurement team or your Risk Assurance advisor. If you intend to engage a contractor or subcontractor, refer to the Health and Safety Requirements for Contractors Standard to assess and plan these important business requirements into your procurement.

Refer to Managing Procurement Risk Guideline.

Process overview The procurement process consists of five key phases:

Important: It is not necessary for all procurements to pass through all five phases. Based on the business requirements, supply, risks, costs and other considerations, important decisions will be made during the scoping and planning phases that determine the remaining phases of the process. For example after scoping the procurement, you may determine it is appropriate to:

• simply order the goods or services from an existing preferred supplier; or

• purchase the goods and services using a selective procurement process; or

• plan the procurement and determine that seeking quotations from several suppliers is the best approach; or

• plan the procurement and determine that running a tender is required.

The following diagram illustrates this and shows some of the key actions within each phase:


Scoping the Procurement

Purpose The purpose of the scoping phase is to:

• understand business requirements and market conditions

• source goods and suppliers appropriately

• identify and minimise any potential risks

• effectively and efficiently use Council resources and funds. The level of assessment will vary and depends on the type, size, timing, complexity and risk associated with the particular procurement.


Clarify business requirements Consider why your BU or the Council needs to procure the goods or services. They must be genuinely needed and fit for purpose, for example:

• a colour printer is not genuinely needed by a BU that mainly prints in black and white and has access to a colour printer in another BU

• a new electrician is not genuinely needed for electrical work at CAB or MOB as it is covered by an existing facilities management contract

• laser printers are fit for purpose for commercial use, rather than inkjet printers, which are more suitable for domestic use

• a Toyota car is fit for purpose for staff use rather than a Mercedes. Identify and engage key stakeholders to determine the specifications of what is required and when the goods or services are needed. Think about any business considerations that apply and whether the underlying business reasons for the procurement are transparent, robust and able to withstand the 'Front-page' test. If there is doubt over the validity of the need, then do not proceed with the procurement.

Refer to Business considerations, definitions of Business requirements, Front-page test.

Review supply sources Use this flowchart to determine the most appropriate source of supply to the Council:

There may be a number of preferred or existing suppliers for the same product or service. Select which supplier to use based on price, availability, quality, fit, health and safety compliance, particular expertise or feedback gained from other staff.


Research market Conduct sufficient market research when scoping a potential new procurement to:

• identify possible suppliers

• assess available goods or services

• obtain indicative market pricing

• understand market trends and conditions

• determine if external funding is available. At this stage of the process:

• identify and declare any potential or perceived conflict of interest (COI) to your one-up manager

• make general enquiries only or use a Request for Information (RFI) to gather information (ie do not request a quotation, proposal or commit to any specific product or supplier)

• ensure your contact with suppliers is not perceived or interpreted as a commitment to purchase

• check for any syndicated procurement contracts, prior procurement projects and other related learning.

Refer to RFI template, Research Market Guideline, Project and Procurement Conflict of Interest Declaration, definitions of COI, External funding.

Check budget and DFA Liaise with your Finance Business Analyst or one-up manager to:

• ensure the necessary funding is available. This may be an approved budget for capital expenditure or operating expenditure in the Long Term Council Community Plan (LTCCP)

• identify and inform the appropriate Council officer with the DFA of the intended procurement and their expected involvement (ie owner or sponsor role)

• identify all the relevant financial codes and charging procedures to use for the procurement.

Important: If you don't have approved budget or DFA, you must not continue with the procurement. A business case will be required to request and obtain approval for funding.

Refer to CAPEX and OPEX Standard, Delegations Standard, Business Case, definition of DFA.


Make initial decisions Use this flowchart to decide the:

• next step for an emergency or low cost procurement

• appropriate template to scope and document a high cost procurement.

Prepare Procurement Brief For high cost procurement that is well understood, easy to source, standard and low risk in nature (ie simple procurement), use a Procurement Brief Template to document and address:

• business requirements

• budget and risks

• timings and change management. If you already have an approved business case, append and cross-reference to this so you do not duplicate information.

Complete and obtain sign-off of your Procurement Brief before continuing to the Planning the Procurement phase.

Prepare Business Requirements and Market Review For high cost procurement which is not simple procurement, use a Business Requirements and Market Review Template to document and address:

• business requirements

• business model and supply strategy

• risks and financial information


• key stakeholders including the Project Owner and Sponsor

• timeframe and organisational impact

• communication and implementation plans. If you already have an approved business case, append and cross-reference to this so you do not duplicate information.

Complete and obtain sign-off of your Business Requirements and Market Review before continuing to the Planning the Procurement phase.

Refer to Business Requirements and Market Review, Business considerations, definitions of Business requirements, Simple procurement.

Planning the Procurement

Purpose Effective up-front planning is critical. The purpose of the planning phase is to:

• determine the procurement method

• select the contract type

• complete and obtain sign-off on the Procurement Plan

• obtain the appropriate management approvals before proceeding. Note: The level of detail in your Procurement Plan must be tailored to suit the size and complexity of each procurement. There are many considerations and no 'one size' fits all.

Prepare Procurement Plan Important: Before preparing a Procurement Plan, ensure you have an approved Procurement Brief or Business Requirements and Market Review.

Use a Procurement Plan template to document:

• what success will look like and the business outcomes sought

• market and risk assessment

• anticipated 'whole of life' cost

• key milestones and timings

• supplier selection and evaluation processes

• contract type

• management approvals required.


Note: The Procurement Plan is a living document and should be progressively updated during the course of the procurement.

Determine procurement method

Use this flowchart to select the:

• most appropriate procurement method; and

• if tendering is selected, the type of tender to run. For roading and traffic procurements for which Land Transport New Zealand (LTNZ) provides a subsidy, the procurement method selected must comply with LTNZ Competitive Pricing Procedures (CPP) requirements.

Important:

• Tendering is not always required for high cost procurements. Use quotatation or selective procurement where appropriate.

• When tendering is required, the Council's preference is to run ‘open tenders' whenever possible to maximise market competition. Closed tenders should be the exception and only be used in certain limited circumstances.


Refer to Tender Cost Guideline, definitions of Tender, Closed tender, Open tender, Multi-stage tender, Single-stage tender, RFT, RFP, Quotation, Selective procurement.

Use quotation

Update the Procurement Plan to record the procurement method as Quotation and your reason for using this method before continuing to Select contract template.

Use selective procurement

Update the Procurement Plan to record the procurement method as Selective procurement and your reason for using this method before continuing to Select contract template.

Use multi-stage tender

Update the Procurement Plan to record the tender type as multi-stage and stage one details before continuing to Select RFT or RFP.

A multi-stage tender is suitable if the...

Stage One Stage Two

• market is large

• purchase is complex and difficult to specify

Use Request for Expression of Interest (REOI)

• market size is unknown

• market response is not clear

• quantity of work is uncertain

Use Registration of Interest (ROI)

Select RFT or RFP

Use single-stage tender

Update the Procurement Plan to record the tender type as single-stage and before continuing to Select RFT or RFP.

A single-stage tender is suitable if the... Stage One

• the market is known

• the purchase is fully and clearly defined

Select RFT or RFP


• the quantity of work is certain; or

• a closed tender is planned

Select RFT or RFP

Use this table to determine the appropriate tender type:

If the... ...is characterised as... Quantity of work Identifiable Uncertain Pricing Specific Flexible Outcomes Fully specified Not fully specified Objectives Clearly defined Not fully defined Then... Use RFT Use RFP

Update your Procurement Plan to record the tender type as RFT or RFP. Important: It is critical that the correct tender type is selected and confirmed in the Procurement Plan to ensure the best outcome to the Council. The difference between a RFT and RFP can be subtle, if you are not certain as to the correct tender type, please contact the Procurement team.

Select contract template Use this table to select the appropriate contract template:

If the procurement

is for...

that involves... then...

building or property - design, architectural, engineering, quantity survey or cost management

contact Project Management Office

roading or civil engineering contact Transport group information, communication or technology (ICT)

contact Knowledge Solutions

engaging an independent contractor use the Contractor or Employee Guideline before utilising (if applicable) the Contract for Services and Letter of Offer.

professional services

other professional services or advice use a Short Form Consultancy Contract

basic or standard service use a Short Form Service Contract

complex or non-standard services use an External Services Contract

services

any other service contact Procurement team


If the procurement

is for...

that involves... then...

roading or civil construction contact Transport group any major construction - building or property

contact Project Management Office

works

minor construction that is not civil (eg building)

use a Minor Works Contract

goods supply of materials use a Contract for Supply of Goods

In certain circumstances it may be more appropriate to utilise a contract provided by the supplier. This may expose the Council to a higher risk and should be the exception rather than the rule and should be:

• adequately justified

• reviewed and signed off by the Council's solicitors. Note: If you remain unsure as to which contract template to use or the contract needs to cover both goods and services, contact the Procurement team.

Refer to Using Legal Services Standard, definition of Contract.

Complete the Procurement Plan Review and complete all remaining sections of your Procurement Plan to record:

• contract template

• key milestones and timings

• evaluation team members, evaluation process, criteria and weighting

• confidentiality and COI declarations for all staff and external advisors involved

• roles and responsibilities

• planned next steps You must obtain an independent peer review of the Procurement Plan and sign-off from the Sponsor before seeking any further management approval that may be necessary. Important:

• When selecting your evaluation team members ensure that there are at least three (but no more than eight) team members who have the necessary business knowledge and technical skills to effectively assess the responses and manage risk.

• It may be prudent to use external consultants in certain limited instances to support the evaluation team by providing market knowledge and subject matter expertise. If consultants are to be involved in a tender process, they


must at the time of engagement complete confidentiality and COI declarations.

Refer to Project and Procurement Conflict of Interest Declaration, Project and Procurement Confidentiality Declaration, definition of COI.

Management approval The following approvals are extracted from the Delegations Standard. They are mandatory and must be obtained before proceeding with any procurement:

If the full value is...

Then the procurement...

$25,000 to $99,999

must be subject to a contestable process unless valid reasons for not doing so are documented and approved by your Management Board Member with appropriate delegation.

$100,000 to $499,999

must be subject to an open tender unless documented and approved to act otherwise by the Council or two Management Board Members.

$500,000 and above

must be subject to an open tender unless documented and approved to act otherwise by the Council or Chief Executive.

Complete the Management Approval Memo and obtain the required approval before proceeding with the intended procurement. Append and cross-reference this approval to supporting documents (eg Procurement Plan and Business Requirements and Market Review) to avoid any unnecessary duplication of information.


7.2 Section 25 LTMA 2003

Land Transport Management Act 2003 No 118 (as at 01 January 2010), Public Act 25 Procurement procedures

• (1) For the purposes of this Part, the Agency must approve 1 or more procurement procedures that are designed to obtain the best value for money spent by the Agency and approved organisations, having regard to the purpose of this Act. (2) In approving a procurement procedure, the Agency must also have regard to the desirability of—

o (a) enabling persons to compete fairly for the right to supply outputs required for approved activities, if 2 or more persons are willing and able to provide those outputs; and

o (b) encouraging competitive and efficient markets for the supply of outputs required for approved activities.

(3) Every approved procurement procedure must specify how procurement is to be carried out (which may differ for different kinds of procurement). (4) It is a condition of every procurement procedure that the Agency or an approved organisation must procure outputs from a provider other than the Agency or that organisation (as the case may require), or its employees. (5) However, nothing in subsection (4) prevents an approved organisation from procuring from the organisation's own business units the provision of minor and ancillary works on terms approved by the Agency. (6) Nothing in this section compels an organisation or person to accept the lowest tender received by it for the provision of any outputs.


7.3 3 Year Capex Transport Programme (2010/11, 2011/12, 2012/13)

Applicable Contract

Programme Summary Contracts, Services & Materials, inclusive of external professional services

Comments

Project Number

Project Name 2010/11 2011/12 2012/13

To be allocated CX086 Wall, Bridge & Tunnel Renewals AP

$2,854,464.12 $2,922,971.26 $2,994,332.86 See below

Comments:- To ensure structural integrity and provide a stable roadway to withstand applied loadings and to ensure continuity of the roadway in terms of width, clearance and alignment. Walls surveyed on a 5 year basis provide information to enable a priority list for renewals. Major repairs to storm damaged structures which do not require immediate action but are a medium to long term risk are programmed accordingly. Bridges/Tunnels are sound, safe and accessible at all times to meet the needs of the community RS500/501 CX088 Thin Asphalt Road Surface

Renew $1,438,359.76 $1,472,880.39 $1,508,839.39 See below

Comments:- Road resurfacing each year: 3.5km of Thin Asphaltic Concrete Paving; 8km of Slurry Sealing. Included in this project is the associated Professional Services including WCC Staff time and materials testing. Work is identified through the councils Road Assessment Maintenance and Management (RAMM) system and dTIMS and is validated by inspection. RS500/501 CX089 Reseals Renewals AP $1,952,423.07 $1,999,281.22 $2,048,091.80 See below

Comments:- Reseal Renewals includes: 35.8km of Chip seal; associated Professional Services including WCC Staff time and materials testing. Work is identified through the Council’s Road Assessment Maintenance and Management (RAMM) system and dTIMS and is validated by inspection. RS500/501 CX090 Preseal Preparation

Renewals AP $2,633,592.47 $2,696,798.69 $2,762,638.50 See below


Applicable Contract


Comments

Project Number

Project Name 2010/11 2011/12 2012/13

Comments:- This project is made up of activities that ensure that all streets programmed for resurfacing in the same or subsequent year are strengthened, shaped or levelled to a standard suitable for long term surfacing treatment. The project also includes major planned road maintenance. These activities include the repair of localised failure, raising of service covers, installation of road drainage facilities, etc. All roads are prepared for resurfacing works at least two months prior to the planned resurfacing date. Roading Drainage facilities are maintained to an acceptable standard. Service covers on roads are set to a level that minimises roughness. RS500/501 CX091 Pedestrian Network

Structures AP $243,860.32 $114,032.97 $116,816.98 See below

Comments:- This project relates to the renewal of pedestrian bridges, subways, retaining walls, canopies and associated structures which form an essential part of the City's footpath network. This work is unsubsidised and includes 26 pedestrian bridges, 5 subways, 5 Canopies and numerous retaining structures.

RS500/501 CX092 Shape & Camber Correction AP

$3,844,061.22 $3,936,318.69 $4,032,420.22 See below

Comments:- Physical Works: 21km of Asphaltic Shape Correction; associated Professional Services including WCC Staff time and materials testing. Road pavements lose shape with usage and the impact of trenching and become less smooth with time. This deterioration is measured as road roughness and the units are NAASRA counts (National Association of Australian State Roading Authorities). The average roughness of the network is measured annually and the current level of service is to maintain the average for all streets with over 500 vehicles per day to about 140 NAASRA counts. Generally those streets carrying the most vehicles, such as arterial, principal and collector are targeted first and correspondingly these have a lower average roughness than the rest of the network. Target roughness for each roading category has been established. New Zealand Transport Agency funding criteria requires that only those projects with benefit to cost ratios of 4 or over (subject to change) are considered. RS500/501 CX093 Sumps Flood Mitigation

Upgrade $368,786.28 $377,637.15 $386,856.81 See below


Applicable Contract


Comments

Project Number

Project Name 2010/11 2011/12 2012/13

Comments:- There is an increased risk of localized flooding because of the effect of infill housing and the uncontrolled discharge of water to the road. Surface flooding is unsafe for motorists and may cause a vehicle to aquaplane. This is a continuing programme with no finite end at this time because of the continual changes being made to the city's urban form. RS500/501 CX094 Pedestrian Network

Footpath Renewals $2,798,801.63 $3,506,466.64 $4,318,749.78 See below

Comments:- We maintain 850km of footpath network to a standard acceptable to the public. The footpaths are graded on a scale of 0-52, (0 excellent, 52 unsatisfactory). Footpaths with a rating of 17 are considered to be in good, sound serviceable condition, free of cracks, potholes, bumps, trip hazards etc. Those with a score of 18 or more require footpath renewals. Footpath assets also include crossings, pedestrian ramps and drainage leads associated with the footpath. We are planning to renew 20 km of footpaths in 2010-11. This work is identified through the Council's Road Assessment Maintenance Management (RAMM) system followed by visual validation process by Council Engineers. Footpath renewals are carried out where the condition of the footpath has deteriorated to an unacceptable level. Footpaths are no longer considered acceptable when they present hazards for the users. Users include not only foot traffic, but those using mobility aids, such as wheelchairs, mobility scooters etc. RS500/501 CX095 Traffic & St Signs Renewals

AP $1,638,737.20 $1,665,275.73 $1,640,538.17 See below

Comments:- To reduce the number of defective/damaged signs around the city and increase the standard of existing signs. Provide new parking signs, provide new directional traffic signage within the city and improve street name signage. Also includes the provision of tourist/scenic route signage. RS453 CX096 Safety Street Lighting

Renewal $317,909.41 $325,539.24 $333,486.97 See below

Comments:- Responding to prioritised customer and line company requests for renewals, renewal of accident damaged and life expired poles and lamp gear. Replace expired poles on pedestrian accesses and walkways and miscellaneous lighting projects. To be allocated CX098 Road Corridor New Walls

AP $1,182,278.96 $1,210,653.66 $1,240,210.63 Se below


Applicable Contract


Comments

Project Number

Project Name 2010/11 2011/12 2012/13

Comments:- Involves construction of new walls resulting from failures of unsupported slopes. Most failed slopes occur during extreme wet weather. Such occurrences are increasing with time as such events become more prevalent and critical road, footpath and property boundaries are reached. The next step in our inventory data collection is to increase our knowledge of our unsupported slopes. RS500/501 CX099 Footpath Extensions AP $471,414.69 $482,728.64 $494,514.01 See below

Comments:- This project is the construction of new footpaths and walkways in the Wellington area as part of the Council’s walking policy. The long term objective is to provide a footpath on at least one side of every road in the urban area to make walking safe and easier. In the next 12 months approximately 10 footpaths will be designed and constructed. New footpath extensions will be constructed on the basis of footpaths required for the implementation of the Council’s walking policy. Requests from the public for footpath extensions will be reprioritised on the bias of Council’s walking policy. RS500/501 CX101 Service Lane Improvements

AP $135,369.37 $138,618.24 $47,046.23 See below

Comments:- Service lanes become properly formed and legalised where they have been designated in the District Plan or clearly intended in the current legal road network. Historic land ownership discrepancies adversely affecting the transport network are resolved. Renewal of existing Service lanes. In the next 12 months the major deliverables are the purchase of land for Feltex Lane and formalising of the service lane.

To be allocated CX102 Parking Asset Renewals AP $0.00 $1,010,742.92 $0.00 See below

Comments:- A full parking meter replacement programme was undertaken in 2004/05. There are 576 Parking meters in the city with 515 being pay-and-display machines. Of this there are about 61 single head meters which are cash-only payment machines. These service predominantly mobility parks. There is currently no other machine on the market that meets the accessibility needs of disabled people but our external contractor is currently designing a multi function pay and display machine that will cater to disabled parkers and also the general public. These will be installed in 2011/12 to replace the deteriorating single head meters along with the remaining 98 "Classic" pay-and-display machines, which have outdated technology and do not provide the alternative payment methods like the rest of the fleet.


Applicable Contract


Comments

Project Number

Project Name 2010/11 2011/12 2012/13

RS500/501 CX108 Street Furniture Renewals AP

$298,050.69 $305,203.91 $312,655.17 See below

Comments:- Replacement of street litter bins, renewal of seats, cycle racks, pedestrian shelters, poster bollards and bollards. There will be additional new furniture provided to meet resident’s requests. RS500/501 CX109 Pedestrian Network

Accessways $310,314.40 $182,081.95 $186,527.31 See below

Comments:- Identify, prioritise, design and construct at least one major pedestrian network accessway each year. Prioritisation based on the number of requests from the public and cost of construction. RS500/501 CX112 Cycle Network

Improvements AP $601,993.11 $605,645.67 $608,496.80 See below

Comments:- This project provides the planning and delivers the physical changes needed to undertake the actions identified in the cities Cycling Policy. This project does not cover the soft measures such as promotion, training etc that will be delivered in C653 travel demand management. The high priority actions for delivering the cycle policy focus on improvements to existing unsafe cycling locations. Thorndon Quay has been identified as the first area to be tackled, it is also proposed to work with Schools to identify areas that could be improved to encourage students to ride to school rather than being driven. There was additional funding provided for the Porirua Stream walkway with planning to begin in 09/10 and construction to begin in 2010/11. To be allocated CX165 Tunnels & Bridges

Improvements AP $643,856.65 $393,144.51 $402,742.76 See below


Applicable Contract


Comments

Project Number

Project Name 2010/11 2011/12 2012/13

Comments:- Many structures throughout the city are old, with some up to 90 years old and designed to lower standards than applied today. These require strengthening or rebuilding to withstand earthquakes and increased loadings. The project enables major structures to be surveyed every five years on a rolling basis and for the highest priority structures to be strengthened. The next activity will be the receipt of the Condition Rating Survey from consultants of 82 bridges and the prioritising and programming work required to be undertaken as identified by the survey. RS500/501 CX171 Minor Safety Projects AP $486,500.40 $498,176.41 $510,338.92 See below

Comments:- To fund safety projects that reduce crashes at a variety of sites, there are a large number of smaller projects most of which are often low cost (but have high benefit for the community). Project identification results from accident analysis work carried out on Wellington accident data and public feedback. Priority for work is also determined by traffic volumes, pedestrian volumes, number of children, number of elderly, special location features and costs. The implementation of these projects is used to address road safety issues that have a high community interest. Works include kerb extensions, pedestrian islands and crossings, roundabouts and speed humps.

RS500/501 CX253 Kerb & Channel Renewal AP

$1,946,420.85 $1,993,134.95 $2,041,795.47 See below

Comments:- Council maintains 1,160km of kerb and channel network in Wellington City. Currently the renewal of the kerb and channel assets is largely determined by renewal of the adjacent carriageway and footpaths. Renewal of these adjacent assets is driven by the annual RAMM Condition Rating Surveys. Carriageway and footpath problems can often be traced back to faults with the street drainage facilities, including deficient kerb and channel. In 2010-11, we are planning to renew 12km of kerb and channel including cleaning 22km of unsealed water table in rural areas, cleaning and repairs of culverts.

To be allocated CX311 Vehicle Network New Roads AP

$5,736,083.01 $2,216,712.09 $571,641.25 See below


Applicable Contract


Comments

Project Number

Project Name 2010/11 2011/12 2012/13

Comments:- This project allows for the construction of new roading, particularly missing linkages in the roading network. Works associated with the northern growth management plan and outstanding linkages west of Johnsonville and north of Grenada are included in future years. Timing of works is significantly influenced by the rate at which development occurs. The extension of Mark Ave from Grenada Village to Glenside was programmed and completed 2008/09 (including the carry forward). This provided a 900m length of road to directly link residents of Grenada and Paparangi to Glenside interchange on the Motorway. Funding was identified for 2010/11 for the start of construction of Westchester Dive to Glenside link. This is expected to be funded and constructed over two years. Ohariu Valley Rd to Westchester Drive and McLintock St extension in 2014/ 15. Woodridge to Lincolnshire, Ohariu Rd to Westchester Drive link, Mark Ave to Grenada North in 2017/ 18. Then in 2018/19 is the proposed Grenada to Gracefield link. To be allocated CX319 Roadside Parking

Improvements $234,758.70 $240,392.91 $246,261.88 See below

Comments:- The project seeks to identify, develop and construct off street or roadside parking facilities where parking can be increased or enhanced and safety improved. The project includes the creating of parks to reduce illegal practices where parking on footpath, berms and broken yellow lines is a common occurrence. We will work through the priority list based on the Bullen Consultants report on parking improvements. We will investigate further in detail the sites listed and determine if we will progress them through to the design stage, resident’s consultation and then implementation. To be allocated CX350 Wall & Embankment

Improvements $628,975.57 $818,729.13 $480,873.11 See below

Comments:- This project is the strengthening of the retaining walls in Ngaio Gorge to ensure that the road remains open after a large earthquake to provide an alternative road/lifeline to Ngauranga Gorge for access in and out of Wellington. The project has further work to complete the strengthening and this has been projected out over the next 5 years. While the strengthening of Ngaio Gorge proceeds, other critical lifelines will be identified and programmed into CX350. In the next 12months, construction of Wall 8 will be completed, the design and construction of Wall 6 completed and planning, design and documentation for the final Wall, Wall 7 undertaken. Work on Wall 8 is due for completion before Christmas 2009. To date the construction cost is less than anticipated because of the relative ease of construction of Wall 8. The "saving" for wall 8 will be carried forward to enable the construction of Wall 6 the cost of which is estimated to be


Applicable Contract


Comments

Project Number

Project Name 2010/11 2011/12 2012/13

over the annual budget. The final carry forward will be known on completion. RS500/501 CX352 Fences & Guardrails

Renewal AP $554,726.67 $568,040.11 $581,908.28 See below

Comments:- This project provides for the renewal of pedestrian and safety fencing alongside roads and footpaths, primarily where there is potential for pedestrians to fall. It also covers the renewal and installation of guardrails for motorist’s safety.

477N CX353 Traffic Signal Renewals AP $452,144.04 $462,995.50 $474,299.10 See below

Comments:- Renewal of selected existing traffic signal equipment including controllers, lanterns, cabling, call boxes & poles. Renewal and extension of traffic CCTV (closed circuit television) network including cameras, monitors, transmitters, receivers & communication links. Upgrade of SCATS traffic control computer software & hardware. To be allocated CX377 Roading Capacity Projects

AP $4,862,827.28 $3,086,390.70 $1,790,174.54 See below

Comments:- This project allows for widening of arterial routes and major intersection improvements to improve the capacity and efficiency of the roading network across the city. This includes areas such as Johnsonville and Adelaide Road where the need for capacity improvements has been identified. This also assists future development aspirations in these areas which have been identified for new growth. Implement the Adelaide Road Framework from 2010/11 to 2016/ 17 envisages road improvements plus property purchases over this period. The traffic solutions for the roading network surrounding Johnsonville Mall are planned for 2018/19 onward although these may need to be brought forward depending on associated development of the mall. RS500/501 CX383 Area Wide Road

Maintenance AP $515,654.92 $528,030.64 $540,922.01 See below


Applicable Contract


Comments

Project Number

Project Name 2010/11 2011/12 2012/13

Comments:- In some cases where road maintenance is required, evaluation will show that it is more cost effective to treat a larger area with a specific technique than treat it in a piecemeal manner. This project encompasses road maintenance techniques which are designed to provide the least cost option over the life of the pavement. Techniques include overlays, rip and relay, grader pave and chipseal, and chemical stabilisation. Physical Works: Approximately 1.5 - 2km of area wide treatment (depending on the technique used); associated Professional Services including WCC Staff time and materials testing. Work is identified through the Council’s Road Assessment Maintenance and Management (RAMM) system and dTIMS and is validated by inspection. RS500/01 CX445 Safer Roads Project AP $988,401.22 $1,012,122.85 $1,036,832.88 See below

Comments:- Area based approach to reducing road crashes on Wellington roads. Uses international best practice methodology to focus on geographic areas of the city, and main transport corridors. Safety engineering, education and enforcement initiatives are proposed together to achieve maximum effect. Primary techniques used are: managing traffic onto the correct roads, and managing the speed of traffic to produce a safe environment for all users. The first stage of this proposal relates to the scoping, consultation and planning works in the first year. Physical works will commence in the second year. Over the long term this project may change its emphasis and look into black spot treatments identifying sites in Wellington that have a poor crash history, carrying out crash reduction studies and implementing safety and traffic flow improvements.

To be allocated CX492 Bus Priority Planning $1,676,093.78 $1,716,320.03 $1,129,072.49 See below

Comments:- This project is for the development and implementation of bus priority measures across the city. This is to meet the growing demand for travel and to provide a viable alternative mode which is attractive to users. Project includes improving amenities such as new bus shelters and pedestrian shelters. ** Bus priority initiatives will continue to be implemented through 09-10 for two years on the Golden Mile (Manners Mall and Courtenay Place). to re-open Manners Mall to public transport. Thereafter the focus will be on the arterial routes leading in and out of the city centre at peak times starting with Kent/Cambridge Tce, Taranaki Street in 2010/11, Adelaide Rd and various works between Molesworth to Willis in 2011/12, Newtown - Constable Street to John St in 2012/13, Kilbirnie to Newtown in 2013/14, Thorndon - Kaiwharawhara to city in 2014/15, Karori Tunnel to Bowen St in 2015/16, Victoria Street in 2016/17, Kilbirnie to Hataitai in 2017/18 and Hutt Rd in 2018/19.

To be allocated CX493 Port and Ferry Access $0.00 $3,881,928.46 $1,483,844.07 See below


Applicable Contract


Comments

Project Number

Project Name 2010/11 2011/12 2012/13

Comments:- This project is for the development and implementation of a plan to improve traffic and freight access to CentrePort and the ferry terminal whilst addressing future traffic growth on the Quays route. This project envisages the Quays route being upgraded and planted with trees. Access to CentrePort land being enhanced by the installation of two new intersections at Kings Wharf and Cornwall St in addition to those existing at Bunny St and Hinemoa St. Access to the Ferry terminal will be enhanced by the construction of two roundabouts - one at Aotea Quay for better connection to the motorway and a second on the Hutt Rd for better connection for areas such as Thorndon and the western suburbs to the ferry terminal. ** 11/12 & 12/13 - Widen Waterloo Quay and install a new intersection at Cornwall Street and design Aotea Quay roundabout; 13/14 - Construct new Aotea Quay roundabout and start detailed design work for the upgrade of Aotea Quay; 15/16 & 16/17- Upgrade Aotea Quay and design Hutt Road roundabout 17/18 To be allocated CX504 Ngauranga to Airport

Corridor Study $0.00 $0.00 $0.00 See below

Comments:- WCC Contribution to the design work that follows on from the feasibility studies and scheme assessments done out of C681, that arose from the approved Ngauranga to Airport Corridor Plan. In 2013/14 the budget will deliver the scheme assessments of High Quality Public Transport Initiatives along the corridor, In 2014/15 the deliverables will be scheme assessments of widening of Wellington Road (Western side of Mt Vic Tunnel) to 4 lanes, and the duplication of Mt Vic Tunnel as a part of the Airport to City Road Improvements.


7.4 3 Year Opex Transport Programme (2010/11, 2011/12, 2012/13) Applicable Contract

Programme Summary Contracts, Services & Materials Professional Services Comments

Project Number

Project Name 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13

477N A026 Traffic Signals Sys Maint AP

$422,466.96 $439,403.48 $457,077.58 $0.00 $0.00 $0.00 See below

Comments:- Maintenance of on-street traffic signal equipment, traffic CCTV (closed circuit television) network and SCATS (Sydney Co-ordinated Adaptive Traffic System) traffic control system. Equipment includes 110 sets of traffic signals, 24 CCTV cameras and 2 SCATS computers. Work is carried out to Australasian & industry standards. WCC also manages traffic signal operations & hardware maintenance on behalf of NZTA (NZ Transport Agency) at 18 locations in the CBD area; all costs are recovered from NZTA. WCC monitors traffic at major events held at the Stadium, and recovers the costs. To be allocated

A153A Traffic Control Asset Stewardship

$0.00 $0.00 $0.00 $165,600.04 $169,574.44 $173,714.44 See below

Comments:- Funding of Traffic Control asset ownership through borrowings and depreciation. Planning and provision of activities and funding required for delivering services to the level specified in the asset management plan. Asset data management. Review and development of the asset management plan. Monitoring asset condition and service delivery against targets, this includes traffic surveys, pedestrian, cycle and parking surveys. Traffic count data is essential for the management of the network, which is done through the Road Asset and Maintenance Management System (RAMM). The system is mandatory if NZTA subsidy is to be claimed. Surveys are also conducted for vehicle travel times, vehicle occupancy and public transport which are required for monitoring the Transport Strategy and for future transport planning tasks. RS453 C026B Street Light

Maintenance AP

$717,027.65 $750,947.99 $770,351.67 $0.00 $0.00 $0.00 See below


Applicable Contract


Project Number

Project Name 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13

Comments:- Routine Maintenance and operation of the street lighting network and amenity lighting.

RS500/01 C026C Road Marking Maintenance AP

$582,817.88 $596,805.51 $610,117.16 $0.00 $0.00 $0.00 See below:-

Comments:- Maintenance of road markings including the use of thermo-plastic paint and reflective raised pavement markers (RRPM). We have chosen a higher quality paint which will provide more visibility to the drivers at night and in poor driving conditions. The expenditure planned for the 2009/2010 financial year will provide sufficient funds for the road marking of arterial roads, residential streets and parking zones. RS500/01 C072A Passenger

Transport Facilities AP

$325,090.87 $332,893.05 $341,020.32 $0.00 $0.00 $0.00 See below

Comments:- Maintenance of public transport infrastructure including signs, markings, bus shelters, terminals, pedestrian shelters and park and ride areas.

To be allocated

C290 Parking Services & Enforcement

$9,378,982.70 $9,606,090.64 $9,838,738.87 $62,260.50 $63,754.75 $84,193.27 See below

Comments:- Provides more than 3000 on-street parking spaces in the central city. This includes enforcement of parking times and charges using meters and pay-and-display machines. This is to ensure that as many people as possible can access parking spaces. We provide off-street parking at Clifton Terrace, the Michael Fowler Centre, and beneath the Civic Square. Clifton Terrace is managed by Council on behalf of New Zealand Transport Agency. On the fringes of the city, we operate the coupon parking zones and resident parking areas.

RS500/01 and RS494

C304 Road Mtce & Storm Cleanup AP

$1,239,183.74 $1,273,224.95 $1,304,309.54 $40,986.04 $41,969.71 $42,994.36 See below


Applicable Contract


Project Number

Project Name 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13

Comments:- Project encompasses planned and unplanned maintenance activities without any renewal value, to maintain pavement integrity, ensure safety, provide access to network and minimise future maintenance costs. Minor planned maintenance activities are crack sealing, rural maintenance and service cover raising which are not part of resurfacing programmes. Unplanned maintenance includes activities such as attending to potholes, edge breaks, minor repairs, dangerous hazards, clean up operations following slips and storms and responses to requests during storms. The project also includes reactive responses to public enquiries and complaints, general customer services and the provision of after hours call out services. RS500/01 C307 Street Furniture

Maintenance $240,500.46 $246,272.47 $252,284.98 $0.00 $0.00 $0.00 See below

Comments:- Maintenance of mall and street improvement areas including seats, bollards, poster bollards, cycle racks, pedestrian shelters and other street furniture introduced by City Development.

RS500/01 C312 Mtce Tawa Shared Driveways AP

$19,354.23 $19,818.73 $20,302.59 $0.00 $0.00 $0.00 See below

Comments:- This project is for the continuation of the previous Borough Council’s initiative relating to the maintenance of 41 shared driveways in Tawa affecting 257 property owners. The maintenance work includes driveway resealing, vegetation control, repair of handrails etc. In the next year, approximately 65% of the budget is allocated to resealing with the remaining 35% spread across the other maintenance items. To be allocated

C377 Footpaths Asset Stewardship AP

$0.00 $0.00 $0.00 $76,590.00 $78,428.16 $80,342.91 See below

Comments:- Planning and provision of activities and funding required for delivering services to the level specified in the asset management plan. Development and review of the asset management plan. Monitoring asset condition and service delivery against targets. Funding of asset ownership through borrowings and depreciation. Collection of condition data for the Road Assessment and Maintenance Management system (RAMM) to ensure reliable, up-to-date data is used in the preparation of yearly footpath renewal programmes. Data is collected on the condition of footpaths and access ways to enable better management of these


Applicable Contract


Project Number

Project Name 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13

assets. Other asset groups where information is collected within this project are street furniture and pedestrian structures. RS500/01 C441 Walls, Bridges

& Tunnel Mtce AP

$50,959.40 $52,182.43 $53,456.41 $0.00 $0.00 $0.00 See below

Comments:- Reactive maintenance of Roading structures including 2400 walls, 4 tunnels and 82 bridges. Activities include minor painting, the removal of graffiti from our structures in some areas, repairs and making safe any unsafe structure sections.

To be allocated

C444 Drains & Walls Asset Steward AP

$0.00 $0.00 $0.00 $7,969.46 $8,160.73 $8,359.96 See below

Comments:- The monitoring of asset condition and service delivery against specified levels in the asset management plan. Management of the associated asset information. Condition surveys will be undertaken on access way walls, banks, culverts and kerb & channel to identify and prioritise works required to meet service targets and minimise asset ownership costs. Asset information will be continually updated in the Council’s asset management systems.

RS500/01 C445 Kerb & Channel Maintenance AP

$575,695.75 $589,512.45 $603,904.84 $0.00 $0.00 $0.00 See below

Comments:- This project covers the routine and responsive maintenance of kerbs, channels, water tables, culverts, and culvert inlets and outlets to maintain the integrity and functionality of the asset. Where kerbs and channels are not performing either structurally or in terms of preventing infiltration of water to pavement foundations, and have missed inclusion on the renewal programme, localised maintenance repairs will to be carried out. The identified faults are attended to on a priority basis reflecting the potential for further damage if left unattended, and the need to complete them in advance of adjacent pavement or footpath renewal works. RS500/01 C448 Pedestrian

Network Mtce $717,562.68 $734,784.18 $752,723.25 $7,993.26 $8,185.10 $8,384.93 See below


Applicable Contract


Project Number

Project Name 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13

AP

Comments:- This project funds the routine and responsive maintenance of the city’s pedestrian areas and pedestrian ways. This project covers the routine and responsive maintenance of footpaths (850km), accessways (65km), and paved pedestrian areas in malls and street improvement areas. The budget also funds repairs to structures on pedestrian ways including steps, batter boards, landings, and drainage facilities. Surfacing for pedestrian areas include concrete, asphalt, timber (stairs and landings), and segmental pavers. Routine maintenance includes drainage works, surface defect repairs, trip hazard removal, pavement strengthening and resurfacing, and storm damage response. Work is generally initiated via condition rating surveys, customer enquiries and fault finding surveys. The project seeks to provide safe, attractive, contiguous and obstacle free passage for pedestrians and other legitimate users of pedestrian areas To be allocated

C450 Rd Safety Education & Promo AP

$24,575.54 $25,165.35 $25,779.74 $970.81 $994.11 $1,018.38 See below

Comments:- To assist community groups with road safety education programmes which build on national and regional road safety campaigns. It also provides for resources to promote road safety in the community and around schools, which has been quite high profile and important over the last year. RS500/01 C452 Traffic Signs

Maintenance AP

$238,033.44 $243,746.24 $249,697.08 $0.00 $0.00 $0.00 See below

Comments:- Maintenance of traffic control and parking signs. This includes coupon parking and resident parking zone signs. Repairs from vandalism to signage. Signs are clear and conform to national standards.

To be allocated

C453 Vehicle Network Asset Stewardship AP

$11,975.85 $12,371.05 $12,706.38 $181,125.00 $185,472.00 $190,000.13 See below


Applicable Contract


Project Number

Project Name 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13

Comments:- Planning and provision of activities and funding required for delivering services to the level specified in the asset management plan. Review and development of the asset management plan. Monitoring of asset condition and service delivery against targets. Funding of asset ownership through borrowings and depreciation. Current asset information and condition data are essential for the management of the network, which is done through the Road Asset and Maintenance Management system (RAMM). The system is mandatory if NZTA subsidy is to be claimed. Annual condition and roughness, biennial skid resistance and triennial structural surveys need to be carried out at minimum. Project also includes development of the dTIMS pavement deterioration modelling to predict future network condition and assess budget requirements. Yearly road resurfacing programmes are produced from analysis of the current condition and historic data from the RAMM database.

To be allocated

C481 Network-wide Control & Mgmt AP

$105,500.00 $108,032.00 $110,669.50 $30,015.00 $30,735.36 $31,485.74 See below

Comments:- This project covers the administration of the Council's Public Places Bylaw, Code of Practice for Working on the Road, Footpath Management Policy and Trading in Public Places Policy, with regard to the non-ordinary use of the transport network for activities such as construction, parades, marches, sporting events, VIP visits, busking, sandwich boards, election hoardings, street appeals and various other commercial and community uses. The following ongoing services are provided: * Issuing of licences and approvals, typically about 300 for Prior Approvals, 600 for sandwich boards, 200 for street activities and promotions, 50 for road closures for activities (through Council Subcommittee), 600 for buskers, 60 for charities and collections, 10 for trading licences, plus a variety of other approvals (e.g. for overweight and over-dimension vehicles, non-standard use of parking spaces) per year. * Recording of Road Works Notices (about 6,000 per year), enforcement of non-compliance & invoicing for applicable fees. RS500/01 C492 Ped Network

Structures Mtce AP

$90,509.12 $92,681.34 $94,944.07 $9,849.36 $10,085.75 $10,331.98 See below

Comments:- This budget is used for both planned and reactive maintenance for 26 footbridges and 7 subways. Planned maintenance include works for pedestrian structures such as suspended walkways, walls of subways, bridges, roading network and pedestrian network. Reactive maintenance includes graffiti removal in some areas, surface integrity and emergency repairs.


Applicable Contract


Project Number

Project Name 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13

RS500/01 C493 Cycleways Maintenance AP

$21,165.92 $26,468.40 $31,783.09 $0.00 $0.00 $0.00 See below

Comments:- This project is to ensure that the existing 10km of cycleways are maintained in a safe condition with clear lane and template markings and signage. Also maintenance of a smooth surface free of deep depressions and potholes. RS500/01 C494 Fences &

Guardrails Mtce AP

$186,656.34 $191,136.09 $195,802.50 $0.00 $0.00 $0.00 Reactive maintenance for pedestrian fences and guardrails.

To be allocated

C577 Cycleway Asset Stewardship

$0.00 $0.00 $0.00 $1,034.96 $1,059.80 $1,085.67 See below

Comments:- Funding of asset ownership through depreciation and borrowings. Planning and provision of activities required to deliver services to the level specified in the asset management plan. Monitoring asset condition and service performance.

To be allocated

C653 Travel Demand Management

$240,200.00 $245,964.80 $251,969.80 $0.00 $0.00 $0.00 See below

Comments:- The overall project involves the development, implementation and monitoring of a TDM plan covering Walking, Cycling, Passenger Transport, Traffic Management Tools, Travel Behaviours Change programmes, Integrating Land Use and Transport Planning and Pricing Methods (including Road Pricing and Parking). Milestones - Parking Policy review, Implementation of Walking and Cycling Policies, increase bus lane provision, development of Organisational Travel Plans.


Applicable Contract


Project Number

Project Name 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13

To be allocated

C655 Bus Priority Planning

$0.00 $0.00 $0.00 $36,575.00 $42,572.80 $54,102.18 See below

Comments:- This project is for the development and implementation of bus priority measures across the city. This is to meet the growing demand for travel and to provide a viable alternative mode which is attractive to users. Project includes improving amenities such as new bus shelters and pedestrian shelters. This budget allows for the collection, analysis and development of scheme proposals. To be allocated

C681 Ngauranga to Airport Corridor Study

$0.00 $768,000.00 $270,642.00 $0.00 $0.00 $0.00 See below

Comments:- WCC Contribution to feasibility studies and scheme assessments arising from the approved Ngauranga to Airport Corridor Plan. In 2011/12 the budget will deliver the feasibility studies of High Quality Public Transport Initiatives along the corridor, In 2012/13 the deliverables will be feasibility studies of the Airport to City Road Improvements. To be allocated

P249 Transport Policy Projects

$0.00 $0.00 $0.00 $92,091.67 $53,341.87 $54,644.16 See below

Comments:- Transport related studies designed to identify and develop options for specific projects to achieve Council's agreed transport policies. Includes preliminary plans where appropriate. Includes also, development of standards and guidelines for various network elements and further work. Also provides for an updated city traffic model and its upkeep


7.5 Project Procurement Summaries Planning and Advice – Activity Summary (Activity here means each engagement of a consultant for Planning and Advice)

Strategic Context Delivery Model Supplier Selection Staged May be:-

• sequential staged or • accelerated staged (construction

commences before design is completed)

Supplier selection methods permitted are:

1. Direct Appointment – within limits (WCC and NZTA)

2. Lowest Price Conforming 3. Purchaser Nominated Price 4. Price Quality 5. Quality Based (negotiate price) 6. Closed Contest – within limits (WCC

and NZTA and via one of the allowable supplier selection methods 1-4 above)

Supplier Panel (This model requires NZTA prior approval, which has not been sought) (Please note that the Council’s Technical Consultancy Pre-qualification system is not a supplier panel).

Stage 1 – Appoint Panel:-

1. Price Quality (Proxy schedule) 2. Quality Based (negotiate price)

Stage 2 – Allocate Work

(a) Document a clear statement of what is being purchased, why, its timing and expected price to be paid

(b) Consider and document the procurement activity against objectives set out in the Procurement Strategy (e.g. value for money economic, environmental and social objectives)

(c) Consider and document how the activity is consistent with the Procurement Strategy, including risks and opportunities

(d) Document any changes in the market, the Procurement Strategy, or assumptions in the Procurement Strategy relating to the activity

(e) Document the capacity, capability, and competitiveness of the market to deliver the activity outputs

(f) Document the capability of the Council to manage the activity

(g) Document the procurement options, including the procurement procedures and the delivery model

Notes on choosing a model:- Consider and document:-

• Complexity and uncertainty • Scale

Notes on the eventual Contract:-

• Need a price regime (e.g. SOR etc) • Need Conditions of Contract (eg

CCCS etc)


Strategic Context Delivery Model Supplier Selection (h) Consider and document alternatives –

collaboration with other authorities, bundling of other activities, innovation, timing

(i) Rank and document the potential key factors of Risk, Complexity, Scale and Innovation each as low, medium or high

Notes: documenting these is typically addressed by completing the Council’s “Business Requirements and Market Review” template referred to in the Council’s Procurement Standard. Not every purchase will require strict adherence to strategic context documentation as listed above. For guidance, “low dollar value contracts” as per clause 10.9 of the NZTA Procurement Manual, will require minimal if any, strategic context documentation. This is in line with the Council’s Procurement Standard requirement in which the Business Requirements and Market Review template applies only to “high cost procurement which is not simple procurement”

• Timing and urgency • Innovation potential • Risk management • Supplier market

Refer Appendix C of NZTA Procurement Manual for step by step supplier selection procedures


Infrastructure – Activity Summary (Activity here means each engagement of a supplier (contractor or consultant) for Asset Management and Operation) Note: Professional services associated with infrastructure projects may also be purchased using the Planning and Advice procurement procedure.

Strategic Context Delivery Model Supplier Selection Staged May be:-

• Sequential staged or • accelerated staged (construction

commences before design is completed)

Supplier selection methods permitted are:

1. Direct Appointment – within limits (WCC and NZTA) (Physical Works and Professional Services)

2. Lowest Price Conforming (Physical Works and Professional Services)

3. Purchaser Nominated Price (Professional Services only)

4. Price Quality (Physical Works and Professional Services)

5. Quality Based (negotiate price) (for physical works, requires NZTA prior approval, which has not been sought)

6. Closed Contest – within limits (NZTA and WCC) and via one of the allowable supplier selection methods 1-4 above

(a) Document a clear statement of what is being purchased, why, its timing and expected price to be paid

(b) Consider and document the procurement activity against objectives set out in the Procurement Strategy (e.g. value for money, economic, environmental and social objectives)

(c) Consider and document how the activity is consistent with the Procurement Strategy, including risks and opportunities

(d) Document any changes in the market, the Procurement Strategy, or assumptions in the Procurement Strategy related to the activity

(e) Document the capacity, capability, and competitiveness of the market to deliver the activity outputs

(f) Document the capability of the Council to manage the activity

(g) Document the procurement options, including the procurement procedures and the delivery model

(h) Consider and document alternatives –

Shared Risk (This model requires NZTA prior approval, which has not been sought) (includes alliance and partnership models)

Supplier selection methods permitted are: 1. Direct Appointment 2. Price Quality (Proxy schedule) 3. Quality Based (negotiate price) (for

physical works, requires NZTA prior approval, which has not been sought)


Strategic Context Delivery Model Supplier Selection Design and Build (includes PSMC)

Supplier selection methods permitted are: 1. Direct Appointment 2. Lowest Price Conforming 3. Price Quality (schedule or negotiate) 4. Quality Based (negotiate or lump sum)

(for physical works, requires NZTA prior approval, which has not been sought)

Supplier Panel (This model requires NZTA prior approval, which has not been sought) (Please note that the Council’s Pre-qualification systems are not supplier panels).

Stage 1 – Appoint Panel:- 1. Price Quality (Proxy schedule) 2. Quality Based (negotiate price) (for

physical works, requires NZTA prior approval, which has not been sought)

Stage 2 – Allocate Work

collaboration with other authorities, bundling of other activities, innovation, timing

(i) Rank and document the potential key factors of Risk, Complexity, Scale and Innovation each as low, medium or high

Notes: documenting these is typically addressed by completing the Council’s “Business Requirements and Market Review” template referred to in the Council’s Procurement Standard. Not every purchase will require strict adherence to strategic context documentation as listed above. For guidance, “low dollar value contracts” as per clause 10.9 of the NZTA Procurement Manual, will require minimal if any, strategic context documentation. This is in line with the Council’s Procurement Standard requirement in which the Business Requirements and Market Review template applies only to “high cost procurement which is not simple procurement”

Notes on choosing a model:- Consider and document:-

• Complexity and uncertainty • Scale • Timing and urgency • Innovation potential • Risk management • Supplier market

Notes on the eventual Contract:-

• Need a price regime (e.g. SOR etc) • Need Conditions of Contract etc (e.g.

CCCS, NZS3910 etc) Refer Appendix C of NZTA Procurement Manual for step by step supplier selection procedures.

procurement strategy nzta - wellington city council · 3. wellington’s public transport system...

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